The truck and SUV market has completely changed over recent years and has almost revolutionized the industry. There are more trucks and SUVs on the market than ever before and more and more people are interested in getting one. But a record recently broken by trucks and SUVs may have you shopping for a used vehicle right away.
Trucks and SUVs break a surprising record
Automobile industry experts at Edmunds recently released a remarkable report regarding trucks and SUVs. After analyzing data regarding sales and off-lease returns, Edmunds’ Used Vehicle Report found that for the first time ever, trucks and SUVs will “make up 52.6% of lease returns.” This marks the “first time that they will surpass the number of off-lease passenger cars returning to the market.”
This influx of trucks and SUVs returning to the market has also resulted in the largest average price gap between three-year-old used and new vehicles for the third quarter in a row.
Why more trucks and SUVs are coming off leases than ever before
According to Auto Remarketing, the report found that there are 3.97 million lease returns expected in 2019, with more than half of those returns being SUVs and trucks, and there doesn’t seem to be an end in sight to this increase in newer-used pickups and SUVs. But that’s because more people have been buying trucks and SUVs than ever before.
According to CNBC, sedans started disappearing from the U.S. car market in 2008, fueled by lowered prices at the pump, an improved economy, and significant improvements in truck/SUV designs. Every year after, overall sales volumes for SUVs and trucks have slowly increased and have begun to take over car sales. In fact, many automakers estimate that their truck and SUV sales will account for 80-90% of their total sales by 2022.
In another report by Edmunds, 2016 brought more vehicle sales than ever before. The U.S. market sold 17.5 million units that year, and the truck/SUV segment sold more than ever before. Leases during that year totaled 4.3 million – 31% of all deals. With more sales and leases, there are simply more SUVs and trucks coming back off-lease.
What this means for the price of used trucks and SUVs
New vehicle prices are higher than ever, and many car shoppers are turned off by the prices of new trucks and SUVs. However, Edmunds’ report may mean good things for potential shoppers. Because of the increase in off-lease SUVs and pickups coming back to dealerships, there will be more options for used but still quite-new, vehicles. With more options come lower prices. In fact, the report by Edmunds states that potential truck and SUV shoppers may be “pleasantly surprised by how much further they can stretch their dollars” by buying from the used market.
The report also found that car shoppers could potentially save almost $15,000 when purchasing a three-year-old used truck or SUV over its new equivalent. Most three-year-old trucks and SUVs will have the same tech and features you may be looking for in a new option. In fact, Edmunds experts claim that “buying used will open buyers up to brands and body styles they would never be able to afford on the new market.”
The future of this used market doesn’t have an end in sight, as retail lease sales continue to increase. The stream of returning off-lease trucks and SUVs may turn the market into a used-vehicle-heavy industry with a continuing gap between new and used vehicle prices.